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Interview

Apple CEO looks at 'all countries' to pick best suppliers

Tim Cook wants tech giant's No. 1 contribution to be health care

Apple CEO Tim Cook speaks to Nikkei in Tokyo on Dec.10. (Photo courtesy of Apple)

TOKYO -- Apple CEO Tim Cook on Dec. 10 defended the company's record of creating jobs in the U.S., rejecting criticism that the company outsources too much to China, a sticking point that President Donald Trump has constantly picked on.

"We've created well over 2 million jobs in the U.S.," said Cook. "The glass on this iPhone is made by Corning in Kentucky. Several of the semiconductors in the iPhone are made in the United States. There's enormous manufacturing happening in the U.S., just not the assembly of the final product."

Cook was speaking exclusively with Nikkei in Tokyo, where he visited local Apple stores and ink supplier Seiko Advance. He also met technology developers including the self-taught 84-year-old Masako Wakamiya.

"The way that we do manufacturing is we look at all countries and look to see what skills are resident in each country, and we pick the best," Cook said, pointing to Seiko Advance. "They're the reason that we're able to put this color on the iPhone. We've worked with them for years and we've grown together. Both parties enjoy working together, we push each other to innovate more."

While Apple has started to shift production capacity out of China, more than 90% of Apple's products are still assembled in the country, Nikkei reported in June.

Apple CEO Tim Cook paid a visit to long-time partner Seiko Advance which supplies ink to the tech conglomerate. (Screenshot from Tim Cook's Twitter feed)

Cook also met students from Rikkyo Primary School, as part of Apple's push for computer science education. Cook said a core Apple belief was that education would solve economic inequalities created by technology and automation.

"We strongly believe coding should be taught in all schools. I'm thrilled that this is going to happen in Japan," he said.

Cook expressed confidence in Apple's ability to still innovate, amid criticism that improvements in smartphone technology are becoming minute and insignificant. Cook pushed back on the idea that the smartphone market has reached its peak.

"I know of no one who would call a 12-year-old mature," he said. "Sometimes these steps are humongous, sometimes these steps are smaller. But the key is to always make things better, not just change for change's sake."

He added: "The ethos and the DNA of the company have never been stronger on the innovation front. The product line has never been stronger." Nikkei reported in October that Apple asked suppliers to increase production of iPhone 11 by 8 million units, after better-than-expected global demand for the new smartphone range.

But Cook wants to cement his legacy at Apple in offering health care services via tools such as the Apple Watch. "If you ask me what Apple's greatest contribution to humankind was, it will be in the health care area," he said, pointing to electrocardiogram technology embedded in Apple Watches sold in the U.S., Europe and Hong Kong that allows users to measure heart rate.

"It's really only a few people that have an ECG per year, a very small percentage of the population," he said. "Now, it's on your wrist."

Apple is used to competition and this will help it in offering health care services, according to Cook. "We probably have more competitors than any company on earth," he said. Apple's biggest competitors in smartphones are Huawei and Samsung Electronics, its Macbook is struggling to gain market share in the personal computer sector, and its Apple TV+ has recently been launched into a saturated video streaming market.

Yet, regulators in the U.S. and European Union think otherwise. The company has faced multiple complaints over how the App Store treats app providers that compete with Apple services.

"A monopoly by itself isn't bad if it's not abused," Cook said, while insisting that Apple does not have a monopoly in any sector. "The question for those companies is, do they abuse it? And that is for regulators to decide, not for me to decide."

Cook also expressed resentment at Apple being lumped together with similarly sized tech companies. Amid growing public dissatisfaction with tech companies such as Facebook and Google for allegedly abusing consumer data, Cook set himself and Apple apart by calling for a U.S. federal privacy bill last month.

Notably, Apple has also refused to decrypt the iPhones of the San Bernardino attackers for the Federal Bureau of Investigation, citing consumer privacy. Two terrorists killed 14 people in an attack in San Bernardino in December 2015.

"It's very important to realize that tech itself and these large tech companies are not monolithic," he said. "You're not our product, that's very clear in our minds. We don't believe in trafficking your data."

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